Michael Hicks brings to us another Tale of TIF Districts. In case you missed it…
The required report has been submitted to the State of Indiana for the year 2015. If you’re interested in looking at the financials of TIF districts in Delaware County have at it.delaware-county-tif-districts-2015 Just for the record, the TIF debt which is slated to be paid off in, oh, say, 25 or more years will more than likely never be retired.
You see, once the debt load is decreased, the borrowing begins again and TIF revenue is never returned to the taxing entities. This includes schools, libraries, general fund, etc.
So what good is a TIF? If managed properly TIF can be a plus for the community with infrastructure and an increase in businesses and jobs. Paying off the districts, and in the case of Muncie, the return of tax dollars would be around $4 million today.
Considering Muncie had to pass an income tax just to make ends meet in 2015, doubt seriously Muncie will be able to pa the debt off early. At least not while it continues to spend more than it takes in. No doubt, everyone involved in local TIF will be out of office the debt will be left for someone else to handle and the people left will be footing the bill.
Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives. James Madison
Please take a look at Muncie’s financials.
These two reports ran in January 2016 and February 2016. The latest report shows a debt increase of $10 million.
Muncie revenue received for the years 2011 to 2015. The revenue sources includes property taxes, federal taxes, state taxes, local taxes, fees, donations and grants.
Detailed Receipts 2011 to 2015
If you would like to look at the revenue streams the reports below give details. As you can see, property taxes have been on a decline since 2011. This should have been the first clue.
When revenue begins to decrease while debt increases it would be wise to consider the cost of debt and what it means. The first cost was public services which could only be fully funded with a tax increase. The second cost is economic development and it will only partially be funded with the recent tax increase.
You do need to consider the cost. If the debt can not be met, and there are no more taxes to increase what then? Fees? Fines? You don’t need to be in the dark when it comes to Local and State government finances any longer. In fact, it is imperative, for our future, to be well informed.
James Madison was a wise man giving wise advice which is still relevant today.
“At some point the State is going to have to step in and do something about TIFs,” said Bainbridge. “If they don’t the whole State could turn into one. They might come to the point where they have to do what California did, and ban them altogether.”
Please see the links listed below:
Revisiting TIFs (PDF)
2015 Indiana Tax Incentive Evaluation (TIF evaluation begins on page 97)
After Mayor Tyler passed the 43% income tax, the saga continues
The City applied for State funds of $48 million to build a downtown walkway, apartments etc. There is no guarantee the city will get any funds.
The city is going ahead with the project even though it has no funding in place. The city hired an outside consulting firm to find the money and the city will pay $6,000 a month for the service.
However, the contract is sealed, so no one is allowed to know how the $6,000/month of taxpayer’s money will be used.
Can we say transparency?
The mayor is embarking on a $48 million project although he doesn’t know how it will be paid for, if the bank will loan the money, how much revenue it will bring into the city or how much it will cost taxpayers.
This will put the city at $112 million dollars in debt. We couldn’t fund $2.5 million without raising taxes, but we can afford more debt?
Oh, and although the city was supposed to include long-term maintenance costs, it was barely mentioned.
This area is known for building, but not for maintaining. Some examples: streets, swimming pool, park buildings, city hall, jail, skating rink, parking garage. All built but soon no money available to keep in good repair.
Are we destined for a lifetime of debt?
If you have been following the City of Muncie’s financials, a shorted till will be of no surprise. If not, you may find your paycheck missing a few pennies as the rush to fill the cash register gets underway. Yes, folks, the LOIT has entered the minds of our elected officials. L-O-I-T (Local Option Income Tax) if passed by the City of Muncie, digs into the pocketbooks of every working stiff in Delaware County. I believed it was just a matter of time before it was introduced and approved.
I’m not going to spend much time discussing the merits or pitfalls of LOIT today. Instead, I am offering two articles and an opinion piece for your reading pleasure.
The first article is the introduction of the tax, setting the tone. The second, a recap of the first and lastly a column by a local journalist (saved the best for last). Perhaps after reading, you’ll get a better understanding.
Here’s a side note: A few months ago I crossed paths with columnist Larry Riley and the chit-chat soon turned to the SAFER grant. I asked if he knew the status. Nope.
Next question, if the grant is not renewed, how would the shortfall be met? Larry responded (much to what he penned) – Mayor Tyler stated there would be enough money to cover the fire department.
The previous mayor, McShurley, was asked the question in 2011 and her answer much the same. If the SAFER grant did not come through, there would still be money to maintain the fire department. Then she said good-bye and left the city with over $7 million operating balance.
The real kicker is after Mayor Tyler said the property tax revenue was down and the LOIT tax is needed for fire safety and to shore up the coffers of Economic Development Tax Revenue (EDIT) he proposed an additional amount of spending nearing $50 million.
Here’s the short of it all.
1.) Mayor Tyler – the city would have enough money for the fire department. Never a word to the contrary.
2.) Mayor Tyler – the tax revenue is down and will need to pass LOIT to maintain the fire department and EDIT funding.
3.) Mayor Tyler – reveals the $48 million canal project.
Chew on it a while…